Earlier on Tuesday, drug price regulator National Pharmaceutical Pricing Authorit (NPPA) gave a formal approval to drug maker Abbott Healthcare to withdraw its "latest generation" drug-eluting stent Xience Alpine from the Indian market, adding fuel to the fears that the Narendra Modi govt's decision to cap prices of medical devices could see drug makers withdraw their "high-end products" from India.

Though Abbott is going to maintain its current inventory of Xience Alpine stent, which accounts for the vast majority of Abbott stents used every year in India, for another six months, the company will reduce its availability by 15 percent per month (over six months) after issuing a public notice on the same.

Companies are pulling out stents from the markets after NPPA regulation. Reuters

While health activists believe the withdrawal of Xience Alpine stents won't make much of a difference since there are many other players in the market, some claim it's a loss of new technology for India.

Xience Alpine is "perceived" to be one of the two high-end stents (the other being fully dissolvable Absorb which was approved for withdrawal in September) that the company had been pushing for withdrawal since April 2017, a month after the Narendra Modi government at the Centre had capped prices of two types of stents — drug-eluting stents and bare-metal stents — by nearly 85 percent, drastically reducing the cost of stents that are used to unclog arteries in procedures like angioplasty and reduce the chances of cardiac arrests.

The government had capped the prices of life-saving coronary stents at Rs 7,260 for BMS and Rs 29,600 for drug-eluting stent variety (eg, Xience Alpine). Earlier, the average maximum retail price (MRP) for bare metal stents was Rs 45,000 and for drug-eluting stents, it was Rs 1.21 lakh.

Xience Alpine's price was more than five-times higher at Rs 1.60 lakh before the drug pricing control was implemented.

A crisis manufactured

"This was the worry that many had expressed that high-end stents won't come to India. It's unfortunate and a loss of new technology to India," Dr Shirish Hiremanth, president, Cardiac Surgeons of India told Firstpost.

Dr Hiremanth fears that NPPA's approval to withdraw Abbott's Xience Alpine could set the trend with other stent makers following suit.

His fears are not completely unfounded as US stent maker Boston Scientific's application to withdraw two of its "latest-generation" stents — Synergy and Promus Premier — is more or less confirmed.

Could it be bad news?

According to sources, mounting pressure from the US government and pharma lobbies seem to have found their way to the Prime Minister's Office, making some believe that US pharma companies pulling out could actually be bad for the Indian health industry and patients.

"The US government is trying very hard to end India's efforts at regulating prices of essential medical devices like stents, and to protect US businesses," says Malini Aisola of All India Drug Action Network, a civil society group which supports the price regulation measures.

Aisola also told Firstpost that the NPPA's approval to withdraw Abbott's Xience Alpine stent is a clear case of "the Indian government capitulating under the pressure of the US government to protect US business".

And that may just be the other side to this story. According to Aisola, there's a larger game at play with a section of private hospitals, pharma bodies, companies and politicians, trying to create an environment of fear by saying that the price cap on essential medical devices like stents will lead to a withdrawal of high-end medical devices from the Indian market. A line that the US lawmakers toed right before Modi's visit in the US in June 2017.

Preetha Reddy of the Apollo Hospital Group recently told The Economic Times that the price cap in stents and knee surgery (another major achievement of the Modi govt) is hurting the healthcare industry and prompting investors to pull out whereas.

Suneetha Reddy, managing director of the group had also spoken against the price cap. She told Financial Express that an "amount of flexibility in pricing" was required to ensure India can cash on medical tourism. Earlier, former health minister Anbumani Ramadoss in April, two months after the price cap on stents was announced, had also spoken along similar lines.

"India is looking at price control on other devices. They (the import lobbyists) are bullying India so that India doesn't get into other products," says Aisola, adding, "This is a foreign interference into Indian policy-making."

Can Indian companies fill the gap?

While several reports presented the NPPA's approval to withdraw Xeince Alpine from India as a sign of 'bad things coming' — not just for Indian health service providers and patients but also for manufacturers of high-end medical devices — and some in the health industry actually agree with it, Rajiv Nath, forum coordinator, Association of Indian Medical Device Industry (AIMED), sees it as an opportunity for Indian medical device makers.

"Over the last two decades, the hospitals and doctors created an image that the multi-national products are better in terms of their efficacy and safety. Most of this efficacy was 'perceived' and has not been clinically proven. And that's why the NPPA had set a price cap on the stents," says Nath, adding that most of the "latest generation" drug-eluting stents come with minor improvements and are more of marketing exercises. "They have charging huge amounts without offering any significant improvements in performance," he says.

The price cap seems to have helped Indian high-end-medical device makers grow positively, AIMED, claimed in a letter to the NPPA, while criticising reports which said that the price cap was affecting Indian stent makers.

However, even if it helps Indian companies, Dr Hiremanth says that none of the Indian stent-makers are US FDA approved — which is considered a benchmark in quality of health products — and hence could be inferior in quality.

"Not that the Indian stents are bad, but a difference of 95 and 100 could mean a lot for some patients," he says.

Nath finds it ironical that Indian companies have to seek US certification to sell their products in India. "Which country in the world does that?" he asks.

Why didn't the govt intervene?

But what's more alarming is the lackadaisical attitude of the Department of Pharmaceuticals (DOP) when it came to blocking Abbott's request to withdraw Xience Alpine stents from India, despite having the power to do so, and even after it was requested by the NPPA.

The price-controlling agency told PTI that it was forced to approve the withdrawal of Xience Alpine stent from India, because, the DOP, which falls under Ministry of (Chemicals and Fertilisers) led by BJP leader Shri Ananth Kumar, didn't accept its request to block the withdrawal.

The NPPA had requested the DOP to exercise government powers under para 3 of Drug Price Control Order (DPCO) 2013, under which manufacturers can be directed to maintain adequate availability of drugs/medical devices in case of emergency, circumstances of urgency or non-commercial use in the public interest.

"The authority, after examining the legal status of the application and taking into account the fact that the DOP has not accepted the request of NPPA to exercise government powers...NPPA is left with no option but to allow formal withdrawal...," NPPA said in a notification, according to PTI.

The fact that the DOP didn't respond to the NPPA's request shows a lack of willpower (or change in it) within the Ministry of (Chemicals and Fertilisers) — and in turn, the Modi government — to follow its words with action.

The revelation certainly doesn't look good for the BJP government at the Centre, which has been also accruing political mileage over its decision to cap price of essentialntail high-end medical devices like stents and kneecaps.

The price control of stents has been lauded as a bold pro-consumer step by not just health activists but also by the Prime Minsiter's Office as well as Modi's ministers.

Minister of State for chemicals Mansukh L Mandaviya had even informed Parliament that the price control of stents will result in annual savings of about Rs 4,450 crore for patients in March 2017. So, why the resistance?

Aisola claims it's all about the US factor.

Xience Alpine still profitable for Abbott

Abbott has been citing "higher manufacturing costs and other associated costs in their manufacturing" to withdraw the Xience Alpine. For Absorb — a fully dissolvable stent — which was also withdrawn recently, the company had claimed that the higher manufacturing and other associated costs made it unsustainable to offer the product in India.

Naturally, Abbott's decision to withdraw its "latest generation" Absorb stents were seen as a victim of the government's cap on the price of stents, turning a blind eye to safety concerns that Abbott itself had raised against Absorb.

As for Xience Alpine, the NPPA in its Tuesday notification insisted that the import cost of the Alpine brand was less than the ceiling price and adequate margins were there (for Abbott), "so the reason of unavailability of sales in India is not understandable".

A spokesperson of Abbott, however, reiterated its previous stand, telling PTI, "The ceiling price that has been set unfortunately makes it an unsustainable business to continue to provide Alpine given our cost of manufacture and other associated costs."

The company spokesperson also lamented that the capping of prices of medical devices has not taken into consideration cost involved in developing new technologies in the field.

"While we are aligned with the government's intent for broad access to healthcare, we are disappointed that advancements among stent generations have not been recognised, which could restrict future investments and innovations that benefit patients," the spokesperson added.

Six-month inventory to be maintained

The withdrawal of Abbott stents, however, is still six months away as the NPPA has directed Abbott to issue a public notice on the same while continuing to maintain an uninterrupted supply of the stent for a period of first six months, which will start from the date of publication and submission of a copy of the same to it.

NPPA further said from the seventh month onwards, Abbott may start reducing supplies of the stent brand at the rate of 15 percent every month for another five months and can withdraw the brand completely after the end of 12-month period.

During the period of one year, NPPA said Abbott must ensure uninterrupted supplies on demand made by patients, hospitals and distributors and no artificial barriers are created to hinder availability.

Abbott Healthcare is also required to submit monthly import inventory and sales details by 5th of every month starting from October 2017, NPPA said in its notification.